Cardinal Group – Embracing Creativity and Passion

I’ve been spending a lot of my time recently thinking about entrepreneurship. What I’m beginning to realize is that it’s challenging, maybe impossible, to understand what it’s like to be an entrepreneur without confronting the fear and saying to the world, “I made this”.

However, the next best thing is to share someone else’s story. Today, I’m excited to welcome Del de Windt of the Cardinal Group, a creative entrepreneur who’s challenging the status quo. What I love about Del’s story is that it resonates with me and provides the confidence to stand up and try to make things change.

Enter Del:

Tell us a little bit about the Cardinal story/brand.
Cardinal Group was conceived in 2004, just as the founding partners began their professional careers out of college, however, the partners just could not fight their entrepreneurial tendencies. The original business model was to invest in student housing and our story is as much a Silicon Valley garage startup as you can get in the real estate space – without the VC money available to satiate our appetites.

We purchased our first institutional asset in 2009 and never looked back. Early successes put us on the map as a small fish in a small pond. In less than five years, Cardinal Group is one of the 25 largest student housing operators in the country and growing. And we’re not just growing in student housing, but in the conventional multifamily space as well. We were just informed that we are one of the 5,000 fastest growing companies in America per Inc. Magazine. Our intent has never been to be the biggest, we want to be the best.

Why student housing?

We were young and felt that our age was actually a competitive advantage in the student housing space. We knew what college aged kids wanted and we knew where to spend money that wasn’t lost on the consumer because we were effectively those kids ourselves. There was a logical investment story for us, it was the one asset class we could raise money behind and we were right.

There was tons of opportunity in such a fragmented space, dominated by a bunch of “Ma & Pa” owner/operators, which is still the case, although there are several institutional players and publicly traded REIT’s in the space now.

Cardinal is active on social media (Twitter/Facebook/Instagram). What’s your general approach/strategy toward these networks?
Yes, we are active, but we are active for specific reasons, not just trying to put content out for the sake of meeting a certain SM quota each day/week. I think the SM landscape is changing rapidly and it is one of the most uncertain and poorly executed mediums in the real estate industry overall. I believe that if you master the “game” of SM that it can be extremely powerful on several different levels, but most importantly it is a reflection of your brand and what you stand for. I think we are good at “the game,” but there is always room for improvement.

Technology is disrupting many aspects of the real estate business. Is there aspect of the business or one real estate tech start-up you’re really excited about?
This is a loaded question for me. There are so many I could pick from and speak about for days, but I’ll spare you and all of the readers. Two things that aren’t too far out there that currently have me excited:

Crowdfunding for real estate investment. I am really interested in seeing how the model of bringing private real estate investments to the general public will ultimately play out. If it can generate enough critical mass, I hope it will provide further transparency and efficiency to a fragmented and inefficient space – time will tell. Cardinal Group has not raised money this way, but I’m interested in trying this at some point in the future. The one RE crowdfunding site we are exploring and a minimal participant in at this time is Fundrise. I’ve been really impressed with Ben Miller, the company he and his brother are building and their “can do” attitude.

I think there is a big push in the real estate operating system side of the house. This is somewhat boring, but so important to what we do, it’s really the backbone of our platform. Without mentioning names the usual suspects are finally bringing their platforms out of the stone ages and I really credit one company with pushing this entire industry forward. My prediction is that this unnamed innovator will eventually dominate the space and uproot the incumbents. However, even if this doesn’t happen, this company has pushed the industry forward and we have fortunately been one of the much needed beneficiaries. Big things are in the works and coming soon. I think this innovation will level the playing for a lot of operators, which is good news for a lot of owners who use third party management.

Cardinal has recently launched a 3rd party property management arm. How are you disrupting that space?
As of January 2014 we officially launched our 3rd Party Property Management platform. It took some time and convincing, but I credit industry legend Laurie Lyons, who recently joined us as a partner at Cardinal Group Management, in pushing us in this direction. Laurie was the CEO of BH Property Services for 15 years and retired to start a family a few years ago (BH is the 19th largest multi-family operator in the country with over 50,000 units under management). We met Laurie in Denver, shared a business philosophy that is eerily similar and most importantly contradictory to the industry’s status quo. From that point forward we knew we had to figure out a way to work together and as mentioned, Laurie was really the catalyst to launching the 3rd Party platform.

I wouldn’t necessarily say we are disrupting the space (yet!), but our approach to property management is fundamentally different than others. I think our approach will be a much needed breath of fresh air in the space. Essentially the difference lies in two things: 1) our approach of becoming a business partner as opposed to a property management, and 2) taking more of a hospitality approach to our HR platform, namely on the recruiting and training side of the house.

What advice would you give to someone just starting their real estate career?
This is more general advice and business cliché, but the older you get the more truth and wisdom you find in old expressions. Measure success by your happiness and passion, not the number of zero’s behind your name. The only way to be successful and happy in business is to do something you’re passionate about and surround yourself with like-minded individuals who share that passion. Specific to real estate, I would say there are so many facets to real estate, do not underestimate the importance of understanding the operating side of the business. It may not be the sexiest part of the business, but it is where the rubber meets the road and tremendous value can be created or destroyed depending on the day-to-day operations.

Del, thanks for sharing your story with us, keeping making things change.

About Me

This is my personal blog where I share tips on starting your real estate career, challenges of doing your first deal, and advice on passive real estate investing. For work, I run acquisitions for Atlas Real Estate Partners, a private investment firm based in NYC where I was the first hire.

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